How the Top 1% ACTUALLY Make Their Money | Ep 792

Welcome to The Game w/ Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth. Wanna scale your business? ⁠Click here.⁠ Follow Alex Hormozi’s Socials: ⁠LinkedIn ⁠ | ⁠Instagram⁠ | ⁠Facebook⁠ | ⁠YouTube ⁠ | ⁠Twitter⁠ | ⁠Acquisition

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Alex Hormozi?

  Bienvenidos de nuevo al juego. Así que, ¿cómo hace el 0.1% más dinero que todos los demás? Bueno, hay tres capas y voy a empezar desde el top, que es global, así que vamos a entrar. ¿Cómo hace el 0.1% más dinero que todos los demás? Hay tres capas. Vamos a empezar con la capa 1, global. Así que si te zoomas hacia afuera, el 1% más dinero de los países del mundo hace cosas diferente a los demás. Y podemos medir la productividad de un país por algo llamado GDP, que es producto productivo doméstico por capita. Ahora, la parte por capita solo significa cuánta producción total hace la economía, así que solo piensa en ingresos, piensa en ventas. Y luego capita es por persona.

• 0:40Alex Hormozi?

  Y así nos permite normalizar diferentes países que son grandes países versus pequeños países y ver cuánto está haciendo el individuo. Ahora, la razón por la que esto es tan importante y por qué empezamos en la capa 1 global es porque si se equilibra todo, podrán ver los más fuertes frenos sobre la creación de la riqueza porque son simplemente hechos en agrión. Y para ser claros, dentro de cada país, por supuesto, hay algunas personas que obtienen mucho más de ese trozo de la torta que otros. Pero incluso a nivel global, hay algunos países que obtienen más de ese trozo de la torta que otros países. Y así, por ejemplo, Estados Unidos tiene el mayor GDP del mundo y Tuvalu tiene el menor. Ahora, por capita, se mueve. Luxemburgo es en realidad el país del mundo que tiene el mayor GDP por persona, así que 151.000. Ahora, te daré un ejemplo de número 2, que es Singapur.

• 1:25Alex Hormozi?

  Tienen el segundo mayor GDP por capita y es también el hogar de Michael, que es nuestro director de medios. Y la razón por la que fueron capaces de hacer eso es porque invierten estos países en dos categorías principales. El número uno es educación y el número dos es tecnología. Y así, si pensamos en esto a nivel global, lo que creo que es importante, es cuáles son las entradas que cada país tiene que ser igual. Las entradas son el tiempo y los cuerpos. Y así, a nivel muy básico, cualquiera de todos estos países a nivel cero puede hacer trabajo menial, que es básicamente cosas que no requieren de ninguna habilidad para hacer. Así que si tuviera un cinturón de portavoz de portavoz y tuviera que conectar dos cosas, otra viene, conecto dos cosas. Es típicamente algo que puedes entrenar a alguien a hacer en unos cinco minutos.

• 2:07Alex Hormozi?

  Y luego simplemente tienes que tener que intercambiar su tiempo haciendo esta tarea muy simple repetidamente. Now, that is typically not valued nearly as highly as other skills, which is why countries will invest in technology and education. The education so that they have more skills take technology to do three things. Technology does, number one, it allows you to do more of what you currently do. So that switchboard person, if there wasn't a conveyor belt in front of them, wouldn't be able to do nearly as many of those things as someone who did. The second thing is that technology allows you to do what you can already do even better. And so think of both of those in terms of units of time, because remember, this is one of the key inputs that everybody has that's even. Whether you're in the richest country in the world or the poorest country in the world, every single person has the same 24 hours.

• 2:50Alex Hormozi?

  And yet, some countries massively outcompete other ones, just like some individuals in every individual economy massively outcompete people within them, which will peel back in layer two. And so imagine you have two different sets of people. You've got 100 people on one side and 100 people on the other. And the 100 people on one side have electricity, Wi-Fi, internet, computers, like just that. Versus the others don't. Well, which one's going to produce more economic value? Obviously, the one on the left. Not because these people are inherently better than the others, they just have technology on their side, right? And so we have to think about ourselves from the country all the way down using the same tools. So at the first layer, the wealthiest people in the world, the 0.1%, invest in gaining skills, buying technology, or learning skills to use that technology.

• 3:35Alex Hormozi?

  Now, if you're hearing this, you might think, like I would, "Well, cool, that's great for them, but what about me?" So that enters into layer two. So let's zoom in on that. What are the skills that actually create the production at the individual level? So instead of global, now let's talk about that per capita, that person, just like you, just like me. Now, how did the 0.1% actually create that gross domestic product? That gross production, that revenue that then gets categorized for the entire country? Well, there are three skills that I'll call BSL, and then they're multiplied by something that I'll use as R. And you're like, "What do these all stand for?" Well, the first thing, category of skills, is around building. You make stuff. You either build bridges, you build software.

• 4:20Alex Hormozi?

  Sometimes building is putting together things so that you can do services, but you build stuff. The second is you sell stuff. The third is you lead people. And these also chunk up, if you want the fancier terms here, to mechanical, verbal, and social skills. So these are the three overarching categories that skill development, as it relates to GDP, can get bubbled up to. Now, to be clear, each of these skills are not binary. It's not, "Oh, you know how to build. Oh, you know how to sell. Oh, you know how to lead." But it's, "How well can you build? How well can you sell? And how well can you lead?" And so with each of these, they create leverage. They get you more for what you put in, specifically time.

• 5:04Alex Hormozi?

  Because if I build something, then I can have many people use it over and over again. If I learn how to sell, I can sell many people at once. If I learn how to lead, I can get many people inside my company to do many things on my behalf. And in each of these situations, that one person starts to accumulate the aggregate production of everyone else that touches either the thing they built, how they got people to exchange money for it, or the people that they were able to lead to deliver. And the outcome of all of these things is the big thing that everyone cares about, which is money. The longer that this lever gets, meaning if I get better and better at building, then more money happens on this side. If I get better and better at selling, more money happens on this side.

• 5:46Alex Hormozi?

  If I get better and better at leading, I can pull this lever with more leverage and get more money. Now, what do the richest people in the world have in common? Well, not only do they have one of these skills developed out a lot, many of them have all of these skills super maxed out. So let's zoom in on some of the biggest financial success stories of our time. So if you look at Zuckerberg, for example, who's the founder of Facebook, when he started, he probably mostly just had build skills. But those build skills were enough that eventually he learned a little bit more about promotion. He built some promotion into the product, which allowed him to get more and more people on. Then, over time, he developed leadership skills so that he could lead the company. And it's very common that building and selling happened in the beginning, and then leading develops over time.

• 6:29Alex Hormozi?

  Because in the beginning, who are you going to be leading besides yourself? Right? Not many people. And this skill naturally will develop in time, but it gives you more leverage on the other two. So let's get tactical on build. So in this book, $100 million offers, I talk about the concept of trimming and stacking. So it starts with looking at all the different problems that a customer presents with. And then thinking, okay, how many different ways can I solve them? And so I use something called the delivery cube to say, okay, if we have this one problem, how can I solve this by thinking about what level of personal attention I want to provide? What level of effort would be expected from them? If doing something like, what kind of environment or medium do I want to solve this problem in? How do I want these people to consume my solution?

• 7:09Alex Hormozi?

  How quickly do I want them to get a response or get their problem solved using my services or product? And then if I were to create a product that was 10 times as expensive, what would that look like? And if I had to create a product that was 1/10th as expensive, but still had to produce the same outcome, how would I build that instead? And so this is a wonderful framework that I like to think through and also wondering, is there a way that we can psychologically solve a problem rather than simply logically solve a problem? And Rory Sutherland talks about this when he explains that some people used to complain about having slow elevators. You could either replace the entire elevator system, put a bigger motor in and try and get people there faster, or you can just put mirrors in the elevators and then people

• 7:53Alex Hormozi?

  stare at themselves and don't notice the time pass. And so that would be a psychological rather than logical solution because customers are by and large illogical. And so we want to make sure that the solution that we have solves the problem and sometimes it's not even in the way that you logically expect. Now, the way that this problem solution cycle actually works, which I talk about in the Leeds book, is that you're going to have one problem they present with and then you're going to solve it. And then what happens is that creates yet another problem. Because let's say that you solve someone's hunger problem with a salty pretzel. Well, what solution comes up naturally or what problem comes up naturally? Well, now they're thirsty. So then you solve that with a glass of water or a soda. And so this, this cycle continues and continues and continues. Now, once you've solved those two problems, what's the next problem?

• 8:37Alex Hormozi?

  Well, now their dessert stomach is empty, so we have to present them with a cookie, right? And so there's always, if you properly solve a problem for a customer, there's almost always another problem. That gets presented as a result of the solution. And the main reason for that is because people are never satisfied. And so, over the span of many years, a good builder will develop an ecosystem of products that solves many customer issues at once. So if you look at Apple, one of the most valuable companies in the world, if not the most valuable, it's not just that they have one product. They've built an end-to-end ecosystem that's closed so that someone can use just their products and solve most of their digital needs. They've got a browser, they've got computers, they've got a phone, they have music where you can buy the stuff. Everything is interconnected. But if you're like, "Oh, I'm gonna build that."

• 9:20Alex Hormozi?

  Well, that also took them, you know, 50 years or however long it's been. So this stuff happens over time. So that covers build, but what about sell? Well, selling is about the perception of the prospect, which is that fundamentally, you might have the best product in the world, but if they don't perceive it to be the best product, or even know that it exists, then there's no way that they're ever going to use it. And so, we want to make sure that we can communicate that value to prospects, ideally at scale. So the simplest, lowest leverage, so think about this thing shortening, the lowest leverage version of selling is selling 101. You sell somebody in person, you sell them via chat, you're just selling and you're closing one customer at a time.

• 10:01Alex Hormozi?

  Over time, you increase the leverage of sales by either you selling more people at once, or getting, through leadership, which I'm getting ahead of myself, getting other people to sell on your behalf. But in either situation, you gain more leverage on the amount of people that find out about your stuff and ideally shift their perception of it so that they want to buy it again and again and again. And when I talk about sell, I actually talk about everything that takes someone from completely unaware to giving you money. Alright, so that's all of acquisition. So that's advertising, marketing, sales, branding, promotion, and conversion, as in getting the person to buy. And so, the easiest way, or the most important part of this, is what I would call the call-out, which is people noticing your ad. And when I say ad, I mean, if you reach out to somebody, that's an advertisement.

• 10:45Alex Hormozi?

  You let people know about your stuff, is the most important part. I love this quote by David Ogilvy. He says, "After you've written your headline, you've spent 80 cents of your advertising dollar." Which just goes to show that that first impression is the Part that one I test the most and the one that will shift their perception the most, which is also part of something called framing. And so how you position, again, how people perceive, the reason the intro of a video is so important, the reason the intro of an ad is so important, the reason the moment you introduce yourself, how you introduce yourself is so important is because it frames everything else that happens afterwards. And so let's imagine that you're at a cocktail party in a big ballroom. Lots of people talking groups, loud music playing in the background. In all that noise, a single sound pierces through it all and you turn around. You want to know the sound, your name.

• 11:29Alex Hormozi?

  You hear it and instantly look for the source. And so a call out is whatever you do to get the attention of your audience. Callouts go from hyper-specific to get one person's attention, to not at all specific to get everyone's attention. Let me explain. So if someone drops a tray of dishes in that ballroom, everyone looks. If a child yells mom, then all the moms look. If someone says your name, then only you look. But again, they all get attention. And so we want to make our callouts specific enough to get the right people and broad enough to get as many of them as we can. And so with each of these skills, you will typically start narrow and go broader. Facebook, when it started as a product, was very narrow. And then it just started with college students and then it expanded to high school students and then it started going to adults, right? When you sell in the beginning, you're just going to advertise to a very small niche,

• 12:13Alex Hormozi?

  as tiny as you can, mostly because you can't compete in the ocean. You're not a big enough fish yet, but you can win in the tiny pond, right? Or maybe even a puddle. But then over time, as you get better and bigger, you can expand the breadth of the people that you choose to target. And so you will always convert a higher percentage, not absolute, but percentage of an audience by being more specific. And so the easiest way to figure out what your customers want to hear when you're advertising and selling to them is to simply ask them. And if you want to be a super advanced student, go look at user reviews of all your competitors and figure out the things they complain about. And then talk about those pain points and the things that you want to attract them with. Now, the 0.1% know how to build things,

• 12:56Alex Hormozi?

  then how to let people know about it and get them to give them money for it, the second core skill here, which then leads us to the third skill. Because once you're building and selling and building and selling, you're probably gonna need help. And that enters into leading. So these are the social dynamics. The reason I think leading is arguably the most important skill, besides learning, is that it is a meta-skill. It gains you access to everyone else's skills. At its most basic form, if you were the best leader in the entire world, you would be able to get the best builder and the best seller to come work with you and align with your overall objective. I consider building, selling, and leading to be the tripod of business. You must have all three. They are the tripod of business. You must have all three.

• 13:41Alex Hormozi?

  Now, you can be imbalanced and have a stool that looks a little bit weird. But if you don't have one of these legs, this thing's gonna fall over. And so you must have all three. Now, the extent to which you have all three will dictate how much money you're able to make. So if you can only sell, and you can't build, and you can lead, then you'd have a bunch of people who are really good at selling something terrible. So this would be like the Wolf of Wall Street's business. So what he went to jail for. And so that is basically lying at scale. Not good. If you just build, and no one finds out about it, and you're good at leading, for example, then you'll just have this thing that's sitting in your garage that you promise is amazing, but no one knows about it.

• 14:25Alex Hormozi?

  And so if no one knows about it, no one can buy it. And on the third extreme, and this is why this one's a little bit more interesting, is that if you could lead, and somehow you found a bunch of people that no one in the organization knew how to sell or build, this is why this is a meta-skill, then well, really, nothing would happen, because you'd have nothing to build, and no one would find out about it. And you just have a lot of people that were somehow organized around doing nothing. And so these are the core things that actually generated the activity. The leadership aligns those activities in one direction. So fundamentally, every single time you're considering bringing someone into an organization, and this is what we're thinking about, like either you are the person getting brought into the organization, or you're the person that owns the organization. But we're talking about the 0.1 wealthiest percent of people. And this is how they think, which is that every new person

• 15:10Alex Hormozi?

  needs to support either selling more people or making them worth more through making the product better. The sad truth of it is that every new hire is a guaranteed cost, but is not a guaranteed return. And so unless they are building or selling, they must support the activity of building or selling, or they are waste. And to give you a classic example that's been touted a lot is Steve Jobs, the late great Steve Jobs, was a very good leader. Now, a lot of people say that he was tough, but they say that they did the best work of their lives when they worked with him. And so it's commonly stated that Steve Jobs didn't build the iPhone. He built the team that built the iPhone. And this is why it's such a high-leverage skill. And this is why it's a skill that the 0.1%, if you look at the top of the Forbes list, all have this.

• 15:55Alex Hormozi?

  So that's fundamentally why it's the third bucket of the biggest skills that generate the most money. But if you're like, huh, is there any other variable that dictates how much the 0.1% make? Well, I'm going to give you the advanced one, which is all of this is multiplied by risk, which is the risk that you're willing to take on. And so whether you're an employee of a company or you're an owner of a company, there is a risk that you take on for the building, selling, and leading activities that you do that generate the economic activity that gives you the percentage of the production out there. If you're willing to take on more risk, this is a multiplier on all of these skills. So if Steve Jobs, and I'll give you, Steve Jobs is a perfect example.

• 16:38Alex Hormozi?

  When Steve Jobs had the company when it originally went public, he owned 15% of the business. He ended up leaving for a period of time, starting Pixar, and then he came back like 10 years later. When he came back, he was gifted a much smaller percentage of the company. Now, here's where it's crazy. When he originally IPO'd Apple, he had 15%. If he had not sold those shares, that 15% today would be worth 465 billion, making him by far the richest man in the world had he lived to this point and kept his shares. And so the reason that he was never the richest man in the world is because when he sold his shares, he gave up a lot of his risk. He gave up a lot of his upside.

• 17:22Alex Hormozi?

  Bill Gates, to the same degree, when he IPO'd, had about 49% of Microsoft. Now, if Bill Gates had continued to double down on that risk, rather than selling and diversifying, which is what he did, today, Bill Gates would be worth $1.5 trillion. He would be more than a trillionaire. But because he chose to diversify, he decreased his risk, and so he got less on the asset that he owned, which was built through building, selling, and leading. And so, we started with education and technology. Now, we zoomed in at the second layer of the individuals, what the actual 0.1% wealthiest people did. They zoom in on their skills of building products that people love, being able to communicate

• 18:04Alex Hormozi?

  the value of that product, and sell them on buying it and using it, and then leading the team of people that could help do that at scale over and over and over again. And if you're like, "Well, which one of these should I start with?" Well, everyone starts on a different BSL path. Now, I personally started with selling, because it's a chicken and egg issue. You have to have something to sell, but you have to have people to sell it to as well. At the very beginning, you must have something to sell. As soon as you have a basic amount of something to sell, then you must sell it. Once you do this well, then you will have to recruit people to help you out, so then you will learn leadership. And so, this tricep will continue to expand, as you get better and better and better at all three of the tripod skills.

• 18:47Alex Hormozi?

  So if you're starting from scratch, you first have to figure out what to sell. Once you figure out what to sell, you need to learn how to sell it. No economic activity can occur without both of these things. You can't sell nothing, and you can't build and not sell. A dollar must exchange for goods and services. So they have to know about it, and you have to have something to exchange. And so, obsessing over your logo, and your branding, and your website is neither of these things unless you're selling the websites, right? And so, you want to just start on, "How do I get people's attention, so that they can give me their contact information, so that I can communicate with them and explain the value of the thing I have? And then, what is required for me to deliver that thing I have?" The first business I ever started, I just gave people my email

• 19:31Alex Hormozi?

  My phone number and then I emailed them personalized nutrition plans and workout plans. So I had no CRM, I had no website, I just did those two things. At the employee level, if you want to make more money, then if you kept your skills the same, you could simply try and take on more risk within the organization saying, hey, I will forego some guaranteed income to have the potential for upside. That would be taking on risk. If you are a business owner, at some point, your business will get limited by either the quality of your product or the product offerings you have. Your ability to sell them, meaning you don't have enough people coming in the door. Or you have both of these, okay, but you can't seem to scale it because you need more people. And so being able to properly identify which of these things is the constraint

• 20:15Alex Hormozi?

  will tell you where you need to reinvest your time to get more out of yourself. And then when you do that, you expand the lever and then more money shoots out. If this video is helping make things click for you, which is, okay, I want to make the most money humanly possible. I want to model the point one percent. And I understand that I have to build, I have to sell, I have to lead, and I multiply all of that by the amount of risk that I'm willing to take on. If you know somebody else in your organization or you want to share this with your employees, it would mean the world to me because I'm trying to make the world a better place through economic activity. And I believe that fundamentally, every economy in the world could be super developed if everyone had enough education and skills.

• 20:57Alex Hormozi?

  So the first layer was global and we figured out education technology. Underneath of education technology, it's like where are we investing that education technology? Technology around building, education around building, technology around selling, education around selling, technology around leadership, education around leadership. And so in each of those settings, if we invest in them, the lever expands and more money shoots out the other side. And so the final layer is environmental. And so BSL creates the money and then that money is the output. That's the other side here. And so it's either wasted, stored, or with a top point one percent do, multiplied. So how does build, sell, lead relate to education technology? Well, the educational component is fairly straightforward. You develop the skills.

• 21:41Alex Hormozi?

  On each of these three, but what about technology? Well, if you can use technology in order to build more things faster, then you will make more money. If the thing that you build is technological and allows more people to use it, then you will make more money. If somebody builds a table, they will make less money than a developer who knows how to make an app that a million people can use because they're able to provide value at scale just with their own skill set. But it's the skill of using technology. So these things are very much interwoven. With sales, sure, you can sell one on one, but the leveraged way of doing it is using technology. If you can develop a personal brand and have trust with a larger audience, then you can sell one to many. If you run advertisements one to many, you're using the technology of the platform and media

• 22:26Alex Hormozi?

  so that you can get more people's attention and then ultimately convert it. From a leadership perspective, if you can track what your employees are doing, if you run project management systems, you can increase the output per employee by using technologies around leadership. And so in each of these sessions, in each of these core pillars of value creation, you're going to have the education to use the technology to maximize your output per unit of time. And ultimately, the money that you make, which is what the 0.1% do. And so with the advent of things like Copilot for coders, coders can actually write code 10 times faster than they could before. With that as our, as our, as our, our working model,

• 23:09Alex Hormozi?

  anybody who is not using technology is always going to be at a disadvantage. And so if you want to be in the top 0.1%, it means you're competing with everyone. And so you want to use as many advantages as you can. And on a personal note, I would say that I have been someone who's been more hesitant to use technology. And I think that it has been a limiter to my success. It's something that I'm spending more and more time on of, okay, how can I incorporate more technology into the products and services that we build? How can I incorporate more technology into how we advertise and sell? How can I incorporate more technology into how we lead, recruit, manage people? Even on the recruiting side, it's like if we can have predictive analytics to figure out which candidates have higher likelihood of, of matching with the organization and being good, long-term productive employees. Then that decreased so much waste for us.

• 23:53Alex Hormozi?

  And again, it increases our output per unit of time. And the coolest thing about education specifically, not necessarily technology, is that when you have these skills, they cannot be taken away. They can't be confiscated, they can't be stolen. And this is near and dear to my heart because, you know, my family was, or that we are Iranian, but during the revolution, we left the country and all of our assets were seized. In the United States, it seems like a very crazy thing that you could lose everything overnight. But in other countries, this happens all the time. The government just says, oh, all that money is ours now. All that land is ours now. Your house is actually our house now. But the thing is, is that the family members that I had who had skills and then were able to scatter all over the world, which my family is, they were able to start all over again and rebuild what they had lost.

• 24:35Alex Hormozi?

  The ones who didn't have skills and only had the few assets they had, struggled a lot and still do to this day. So BSL creates the money. And then that money is either wasted, so it goes off the map. It's stored, meaning it basically stays the same. Or what the top 0.1% do is it's multiplied. And the way that they multiply it is they either buy stuff or they lend. So you can only do two things with money. You can give it to people and then they give you a little bit more of it back in the form of debt. Or you buy stuff with it that either goes up in value. Sometimes it can go down. But the hope is that it goes up in value and it produces an output.

• 25:17Alex Hormozi?

  So an example of the storage would be I buy a brick of gold. A brick of gold does nothing and it's speculative in that we hope that somebody else in the future will pay us more for that brick of gold. And no matter what currency I have, I can trade gold for euros. I can trade gold for Bitcoin. I can trade gold for US dollars. It doesn't matter, it's a store of value. And as far as we've had in human history, people still value gold. Now, you could take all of the gold in the world, and this is a Warren Buffett example. You could take all the gold in the world and put it in the middle of a baseball field. And it would be about as tall as the stadium and be a big round globe. It doesn't matter what you do to that big ball of gold. A hundred years from now, it'll still be a big ball of gold. But if you took that same amount of economic value and you invest.

• 26:01Alex Hormozi?

  tested it through buying, you could buy all the farmland in the United States and about 13 Exxon Mobils. And so the amount of money that those farms and Exxon Mobil would spit out every single year over that 100 years would be at least greater than zero. And so in that way, this is how this loop of wealth gets spun. And so when you are buying or lending, you're either lending to people who are doing BSL. And the risk that you incur is that they don't actually succeed and you never get your money back. You're compensated for the risk based on the interest that you charge for them. So you basically sell them money for more money later.

• 26:40Alex Hormozi?

  With buying the assets, what you're doing is you're buying a percentage or the entirety of their build, sell, lead. Now, if you recall earlier, I said this is all multiplied by risk. And so as a result, you get to have an outsized percentage of what other people are doing to build, sell and lead. And then this gives you even more money over time. In understanding this, this is why I built acquisition.com the way I did, which is we have these companies that generate money. And then that money either goes back into the company to make it a bigger company, or it goes into buying another company that generates money.

• 27:22Alex Hormozi?

  But then this process repeats itself over and over and over again. And it compounds unto itself. So no matter how big you get, you can keep reinvesting all of that money. And then it's a percentage based growth. So whether it's a million dollars growing by 10% or a billion dollars growing by 10%, you're still growing 10%. But the absolute amount of what that 10% is, is $100,000 versus $100 million. And so if you're the individual, you can take this money and you can invest it in people who are going to do build, sell, lead in your company where you take on more risk, which means that you get outsized returns on the investment in the people that's within an organization.

• 28:04Alex Hormozi?

  You can buy a slice of an organization of all of those people and not have to necessarily do anything. That's what the public markets are more or less all about. Or investment funds do. Or at the most micro level, you could just take that money and invest it in yourself by buying skills. And what does buying skills even mean? It means you pay someone to give you feedback on an activity such that you can replicate the outcome that they can already do. Fundamentally, that's what buying skills is. And so you find someone who has the skill that you want. And then you offer them money so that you can continue to do the activity in front of them. Until eventually you replicate the outcome that they have. Because they have taught you the variables that they use to recreate that skill.

• 28:47Alex Hormozi?

  And once you can do it without them and get the same outcome, then you have learned. And so if we're thinking about this in terms of levels, you can have a piece of a company. You can have people that you hire in a company, or you can put that money into yourself. But all three of these are going to relate to BSL. Build, Sell, Lead. And to what degree is the risk that you take on? So buying a piece of a company would be probably higher risk. A little bit less risk would be bringing somebody in and paying them. The lowest risk is going to be investing in yourself. But here's where it gets kind of interesting, is that when you invest in yourself, this can also give you all of the skills that you need to do all of these things better.

• 29:31Alex Hormozi?

  Which is why, and I will continue to hit this until the day I die, you will always be the best investment. And so you want to max out this bucket to the greatest degree possible. And the limitation that you will have when you do reinvest in yourself is the time it takes to learn the skills. And how many skills you can learn. But at any given time, you should always be spending as much money as you can to buy the most valuable skill that is constraining your growth. And so if you look at build, you look at sell, you look at lead, you figure out the one that's limiting you the most. And you put as much cash into that thing as you can. You pay every expert you possibly know, or don't know, or need to know, in order to get what you need to move forward. If I could isolate one decision that has changed my life forever,

• 30:13Alex Hormozi?

  was the willingness to invest my money in the potential to learn a skill from someone who is further ahead than me. And I, I will probably do that till the day I die. Because I have gotten better returns on that money than anything else in the world. So, building and selling, that feels relatively straightforward. You learn how to code, you learn how to make a service, or you learn how to advertise, you learn how to sell. But how do you learn how to lead? Well, I think an important part of this is learning how to orient behavior in a specific direction that yields the highest returns. And when I say orient behavior, I mean the behavior of the people who work for you or work alongside you.

• 30:55Alex Hormozi?

  Strongest way that I have been able to get better as a leader is by eliminating wasted communication. And so what that means is both internally amongst themselves, but also from me to them. And so that means that I think the vast majority of people are very ineffective communicators. Is that they say many words, and most of the times, they don't even know what they're saying. And I'll give you an example. So I had a director a couple of days ago who came up to me. They wanted to reconcile, this director was over a department, and they said, "Hey, you know, one of the people in my team has basically complained that somebody who's a director report of mine is doing this issue." And so I said, and I'll tell you the words that they said. They said, "I'm here because I want to bridge the gap between this department and this

• 31:40Alex Hormozi?

  department, and I want to support the growth and the overall initiatives of the business." And all of those sound like wonderful corporate words. But I looked at the person, and I said, "What do you want to have happen?" And they kind of looked at me differently. I said, "What behavior are we currently doing that you would like us to stop doing? Or something that we're currently not doing that you would like us to start doing?" And so what's interesting is that when that question was posed to the individual, they actually didn't have the answer. And so this is very common, is that someone will know that there is a problem, but they will not come with an intended change in behavior. And so you have to take that extra next step and say, "Okay, there's a problem. What potential changes in behavior on my team or someone else's would need to occur

• 32:24Alex Hormozi?

  in order for us to decrease the likelihood that this problem happens again in the future?" And so when you frame things from, "What would I like to occur? What would I like to have happen as a consequence of this conversation?" You'll find that many conversations don't need to be had to begin with, because most people don't even define that. And so they basically just make face noise at each other for 30 minutes and call it a meeting. But no one actually changes what they do. And so if you don't change what you do as a result of communication, it was wasted. It literally took effort from both people, time from both people, and then no change occurred. And believe it or not, this is the vast majority of people in the vast majority of companies, which is why the biggest threat to big organizations is waste. And so if you want to lead, you need to learn how to communicate clearly what you want someone to do, what you want them to stop doing,

• 33:08Alex Hormozi?

  or you want them to do instead. And by defining it in those terms, it cuts away a lot of the ambiguity. I had a meeting not that long ago with a different person in the company. And I said, "I don't understand what you do." Now, most people you could imagine would be terrified by this question. But I said, "I'm not intending to intimidate you. The point is that I actually don't understand, and I'm seeking clarity." One of the first things the individual brought up is, "I do a lot of this research so that I can better understand X, Y, and Z." And I said, "What does that change about what we do?" And the honest answer was, "It hadn't changed anything about what we do." And I said, "So then if all of this time that you spend researching doesn't change our behavior, you don't need to do it. It is a waste of time." And so, just like I could measure the temperature in the rooms when I record them,

• 33:53Alex Hormozi?

  and I could measure the temperature of every room that I walk in throughout the day, just because I can measure it doesn't mean it's going to change anything. And so, many people spend a lot of time trying to, quote, "understand." But the only reason, the only way you will get a return on that understanding is by changing what you do. And so, finally, after several kind of peeling back the layers, I was able to say, "You do this. This is what you do. You click these buttons. You do this stuff." Okay, and then all of a sudden, the scope of what this person's role was went from this to this. And I was like, "These are the only things that drive economic activity. So, how do we get you to do more of these things? Do them faster, do them better?" That is the question that we need to answer together. And by doing this, it just melts away a lot of the pretense,

• 34:38Alex Hormozi?

  a lot of the corporate jargon. And so if you get into a conversation with someone, and you don't know what they're saying, don't assume that you're dumb. Assume that no one knows what's going on. And I think that if you seek clarity and you seek truth, then you will ultimately find the best outcomes, rather than seeking agreement. And if you enjoyed this video on what the 0.1% wealthiest people invest their time and money into, then you're going to love the video that I made on leverage. It's the number one video on my channel. It's basically how to go through a wealth warp of time, who's one of the first presentations I made before I became public. Basically a consolidation of many of the thoughts that I had that created the generational wealth that my wife and I have been able to experience. I hope you enjoy it.